Early Resolution of Overcharges for Therapy in Nursing Homes Is Unlikely

HEHS-96-145: Published: Aug 16, 1996. Publicly Released: Sep 17, 1996.

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Pursuant to a congressional request, GAO reviewed the Health Care Financing Administration's (HCFA) progress in curbing overbilling for occupational speech and physical therapy services.

GAO found that: (1) therapy charges billed to Medicare by skilled nursing facilities (SNF) and rehabilitation agencies have more than doubled since 1990; (2) some providers are exploiting weaknesses in Medicare's payment system, since HCFA places no absolute dollar limit on Medicare reimbursements for occupational and speech therapy; (3) HCFA is unable to determine whether a claim is reasonable prior to payment, since SNF are not required to specify how much therapy time they are billing for specific services; (4) HCFA has taken a number of interim actions to curb inappropriate charges, such as implementing salary equivalency guidelines for those SNF providing occupational and speech therapy services; and (5) HCFA officials have emphasized the importance of more systematic legislative approaches, such as unified billing, to solve the problem of therapy overcharges.

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